Atlas Copco (Hold, TP: SEK170.00) - Lofty valuations into 2024e
Although the risk/reward seems lacklustre and the stock is pricing in a rather upbeat semiconductor market for 2024 in our view, we do not believe the valuation alone is a good enough reason to turn negative on the stock. We reiterate our HOLD but have raised our target price to SEK170 (145), despite cutting our 2024–2025e sales and adj. EBIT by 5–4% (on FX changes), with our target price assuming a lofty 2-year forward EV/EBIT of 21x (was 17x).Atlas Copco provides industrial productivity products and services. Co.'s operations are divided into four business areas: Compressor Technique (provides compressors, vacuum solutions, gas and process compressors and expanders, air and gas treatment equipment and air management systems), Industrial Technique (provides power tools, assembly systems, quality assurance products, software and service through a global network), Mining and Rock Excavation Technique (provides equipment for drilling and rock excavation), and Construction Technique (provides construction and demolition tools, portable compressors, pumps and generators, lighting towers, and compaction and paving equipment).
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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